Senators find fault with new offshore drilling rules

Both Louisiana senators took exception to a final set of federal safety rules for offshore drilling issued by the Bureau of Safety and Environmental Enforcement.

U.S. Sen. Mary Landrieu, D-Louisiana, said the regulations still place too much cost on inspection and construction.

The new rules are a final “fine-tuning” of a series of emergency measures put in place after the BP oil spill in 2010.

Landrieu said that while she is in favor of safer drilling practices in the Gulf of Mexico, the new rules may hamper smaller companies from continuing to operate along the Gulf Coast.

“I am concerned that certain aspects of this rule do not reflect cost-beneficial approaches to inspection and construction,” she said. “I am strongly in favor of safe drilling practices, and very proud of the industry’s voluntary efforts to increase the safety of drilling operations, but I am concerned that these rules will harm the ability of our small and independent producers to continue to operate in the Gulf.

“I look forward to continuing to work with industry and regulators to create cost-effective rules for our offshore industry.”

Louisiana Mid-Continent Oil and Gas Association General Counsel Mike Lyons said his industry group was still looking over the 137-page ruling line by line, but one bright spot in the finalized emergency rule implemented after the BP blowout in 2010 was that some industry comments were taken into account in the final rule.

“After many meetings and forums between regulators and oil and gas industry professionals (since the Deepwater Horizon tragedy), it is good to see them address some of our concerns,” he said.

Addressing the final costs of the new safety rules, he did not speak in favor of the new costs to the oil and gas industry, but did say the feds reduced the costs substantially from the original emergency rules.

The final rule reduced the cost the industry is expected to have to pay from about $136 million annually to approximately $53 million, a reduction of about $86 million, Lyons said.

U.S. Sen. David Vitter, R-Louisiana, also disagreed with the new BSSE rules.

Vitter felt oil and gas companies would comply with the regulations, but he took issue with the Obama administration reducing the ability of the oil and gas industry to provide the nation with necessary energy resources.

“Our domestic energy producers work diligently to comply with sensible and necessary regulations — which they certainly should, but, the larger issue is the growing concern that this administration is still systematically reducing our ability to produce energy in the Gulf,” Vitter said. “I’ve introduced legislation to replace the Obama administration’s 5-year plan for energy production and leasing on the outer continental shelf with a 5-year plan that is more in line with the energy and economic needs of the United States.”

Congressman Jeff Landry, R-Louisiana, said his office was also still reviewing the document, but he has been critical of the Obama administrations increased regulations of the local oil and gas industry.

He said he did not want any regulation that would hurt the livelihoods of residents working in the industry.

“The most valuable resource we have in the Gulf of Mexico is not the oil and gas under the Gulf, but the men and women who risk their lives to extract it,” Landry said.

Some environmental activists, meanwhile, also panned the rules, calling it insufficient to prevent another catastrophe such as the explosion on the 2010 Deepwater Horizon rig that killed 11 people and spilled 200 million gallons of oil to leak into the Gulf of Mexico.

The safety measures are intended to make sure oil flow can be stopped if there are problems. They deal with how the wells are designed, and how the cement and barriers used to secure them are tested.

The rules also require that blowout preventers, which failed in the 2010 disaster, be independently tested by a third party to ensure they are capable of cutting off the flow of oil.

“Today’s action builds on the lessons learned from the Deepwater Horizon tragedy and is part of the administration’s all-of-the-above energy strategy to expand safe and responsible development of America’s domestic energy resources,” Jim Watson, director of the Bureau of Safety and Environmental Enforcement, said in a statement.

The biggest change to the interim rules deals with industry standards that were broadly referenced as part of the rule. Industry groups, including the American Petroleum Institute, argued the rule was confusing and could introduce new risk into the system. The interim rules made mandatory some measures that the industry had made voluntary. The result was that some measures appeared to conflict with each other.

The revised rules released Wednesday restored the industry’s distinction between “should” and “must.”

Watson said the changes incorporated input from stakeholders, suggestions from the public and recommendations from investigations that followed the spill.

“We are reviewing the rule and hope that they carefully considered the language used in the document to allow certainty and clarity for the industry,” said Reid Porter, a spokesman for API. “Our No. 1 priority is safety.”

But environmental activists said even the positive elements of the rules were undermined by a lax inspection system and paltry fines that the industry will laugh off.

“They basically said to the oil industry, ‘OK, I guess we’re going to have to regulate you,’ and the industry said, ‘OK, here are some things that won’t hurt too much,’” said Jacqueline Savitz of Oceana, an international ocean-conservation group.

Offshore drilling has become highly politicized, pitting those concerned about the practice’s safety against those who argue for increased domestic energy production amid a weak economy. President Barack Obama issued a moratorium on offshore drilling in the wake of the BP spill, but reversed it months later when the emergency rules were put in place.

More than 750 permits for offshore drilling activities have been approved since the Deepwater Horizon spill.